Warren Buffett and the Business of Life
0553384619
Alice Schroeder
Notes
…people who invest in innovation historically have not been glad afterward…Buffett avoided technology stocks partly because these fast-moving businesses could never be run by a ham sandwich.
“It could make me independent. Then I could do what I wanted to do with my life. And the biggest thing I wanted to do was work for myself. I didn’t want other people directing me. The idea of doing what I wanted to do every day was important to me.”
Warren Buffett
Warren thought of all businesses this way. The employees who managed the business shared in the earnings that their labors produced. But they were accountable to their owners, and it was the owners who got the gains as the value of the business increased. Of course, if the employees bought stock themselves, they became owners, too, and partners with the other capitalists. But no matter how much stock they owned, as employees their job required them to report to the owners on how well they had done. Thus, Warren saw a shareholder meeting as a time of accounting for the stewardship of the managers.
“I got half the upside above a four percent threshold, and I took a quarter of the downside myself. So if I broke even, I lost money. And my obligation to pay back losses was not limited to my capital. It was unlimited.”
Warren Buffett
“‘Who’s my most valuable client?’ And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.”
Warren Buffett
…strong-willed and ethical entrepreneurs often cared more about how they and the companies they had built were going to be treated by the new owners than about grabbing the last nickel in a sale.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price…we look for first-class businesses accompanied by first-class managements. That leads right into a related lesson: Good jockeys will do well on good horses but not on broken-down nags.”
Warren Buffett
“Wall Street is the only place people ride to in a Rolls-Royce to get advice from people who take the subway,”
Warren Buffett
“…if you thought of yourself as having a card with only twenty punches in a lifetime, and every financial decision used up one punch. You’d resist the temptation to dabble. You’d make more good decisions and you’d make more big decisions.”
Warren Buffett
“when in doubt keep holding”; he said, “I’ve made most of my money sitting on my ass.” He never sold failing businesses unless their economics turned from simply bad to parasitic…he only sold when a company’s competitive advantage disappeared, he lost faith in management, or he needed cash.
This is a foundational book.